EXMACHINA

Data De Groove

There is a new generation of investment managers which will disrupt asset management. These managers – which engage in Autonomous Learning Investment Strategies (ALIS) – use unstructured non-financial data, machine learning, and record-low computer processing and storage costs to run innovative investment strategies at lower costs vs. traditional fundamental and quantitative managers. ALIS managers typically don’t originate from the traditional finance world of Wall Street and MBAs, but rather they are run by PhDs and have their roots in the counter-culture arena which include gamers and hackers (though benign ones).

It is therefore fitting that we’ve drawn the title of this paper from a Falco album, Data De Groove. The album was released nearly three decades ago, in 1990, and was dedicated to the computer era. At that time society was still in early innings in the ‘computer era’, and therefore we would state that Falco was decades ahead of its time, at least with Data De Groove. (Though the author notes that he personally was an early adopter of technology, having had an original IBM 8086 PC dual floppy disk drive PC with a monochromatic monitor, nearly a decade earlier.) […]